The Steady Hand

Central-banking superstar Mark Carney is back in the news this week calling out the UK government's self-inflicted financial turmoil. But what's really going on behind those twinkling blue eyes?

Sep 29, 2022

The morning I meet Mark Carney is the first clear bright day in London in what feels like months. Just a week and a day since Britain’s historic break from the EU and there’s palpable relief on the streets of the City, London’s ancient square mile and the beating heart of global finance. It’s not optimism in the air so much as the realization that the sun is indifferent to the petty politics of humans. The universe turns, the climate warms, the markets rise and fall, and spring will come again. As I step into the gloom of the Bank of England’s vast lobby, a top-hatted bank steward checks my bag then grins like a shot of whiskey’s been tipped in his tea.

The governor, when he appears, is positively fizzing with good humour. Maybe it’s the sun. Or maybe it’s the fact he’s just a few weeks shy of vacating a role he was somewhat ambivalent about in the first place and was subsequently persuaded to extend for two years. Whichever, it’s working for him.

Carney strides down the hall, beaming and vigorous, a man who looks born to inhabit the slimmest, silkiest Savile Row suit that sterling can buy. (With a much-publicized pay packet of $1.7 million, he can well afford it.) Young aides scurry around him clutching files, checking encrypted phones, trying and failing to keep up with their 54-year-old boss. Much has been written about Carney’s good looks, but in person it’s not so much the symmetry of his face that’s remarkable as the way he moves, which is fast with the loose-limbed precision of a dancer. He seems dynamic even when still, like he’s capable of sudden movement but also entirely the master of himself. It makes sense. Carney has spent much of his career as a central banker if not outright breaking the mould, then boldly nudging its boundaries.

As of March, Carney will, for the first time since university (Harvard then Oxford if you even needed to ask), find himself without a paying job. “Maybe I’ll start a podcast in my basement,” he says, leaning toward my recorder. “Does Maclean’s do podcasts? I’m available. Is anybody listening?”

I tell him it wouldn’t be a bad idea—people would tune in. But he knows that. This is a man who’s used to the world paying close attention to every word he says. Now it’s just about choosing the right platform.

It’ll be hard to top his current domain. Founded in 1694, the Bank of England is a monolith of a public building that makes the skyscrapers of Wall Street look cozy by comparison. Sprawling over 3.5 acres, with a workforce of roughly 4,500, the palace Carney presides over sits atop a literal pirate’s booty. Beneath its polished floor languishes some $340 billion in gold bars, a fortune rivalled only by that of the U.S. Federal Reserve. Think of it as a cookie jar labelled “open in case of mass panic.” The vaults are closed to the public, locked and guarded. Only the governor has the key.

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A protestor at the Bank of England wears a a Carney mask to demand climate-friendly investing in London, Britain July 11, 2019. (Peter Nicholls/Reuters)

But Carney is relinquishing all this power and gold for another job—the UN Special Envoy for Climate Action. It’s a part-time gig previously performed by erstwhile New York mayor and Democratic leadership contender Michael Bloomberg for which Carney will be paid the sum of US$1 per year. It’s also one that suits his interests as he moves with his family—a wife and four daughters, two of whom are still in high school—back to their home in Ottawa.

He is, he tells me, looking forward to having some free time after the 24-7 aspect of his previous jobs (13 years hopping around the globe for Goldman Sachs followed by 12 years as a central banker in Ottawa then London). While he’s clearly at a crossroads, it’s impossible to imagine Carney without a plan—or several plans, all contingencies mapped out and reckoned with in advance. Plotting and adapting, after all, is Mark Carney’s thing.

That and having opinions. During his time in London, Carney spoke out repeatedly on the issues that moved him. He cautioned banks and big business against ignoring the risks of climate change, and weighed in decisively on far more controversial issues (most notably the dangers of Scottish independence and Brexit). Unsurprisingly this habit of speaking his mind when asked drew public adulation and bile in equal measure. In the extended agony of the Brexit standoff, Carney came to be seen as a somewhat divisive figure. In the absence of a functioning opposition, Remainers hailed him as one of the few public figures willing to fill what many regarded as a vacuum in the debate. On the other hand, Jacob Rees-Mogg, the Tory back-bencher and hardline Brexiteer, declared in a BBC interview that Carney should be sacked, calling him “a second-tier Canadian politician” who had “politicized the Bank of England.”

While Carney can shrug off such obviously partisan attacks, it’s reasonable to consider: Was it idealism or opportunism that prompted him to muscle in where other, less ambitious technocrats might have floated safely above the fray? In any case, it can’t have hurt his image to be publicly rubbished by a conservative fringe oddity like Rees-Mogg.

None of it is likely to hurt him in his new UN role, nor back home in Ottawa. Having been sneered at in a right-wing tabloid like the Daily Mail will only help Carney’s project if he does plan to take his long-rumoured run for the Liberals.

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Back in 2012, before he announced he was moving to London, there was a flurry of media speculation on whether Carney would run once he’d finished his term as governor of the Bank of Canada. At the time it was widely reported the technocrat was courted by both Stephen Harper’s Tories and the then-floundering Liberals, who were in chaos in after the two successive disastrous leaderships of Stéphane Dion and Michael Ignatieff.

Then as now, Carney declined to confirm his party allegiances, though it was reported that if he ran for anyone, it would be the Grits—speculation that seems more certain now that he’s revealed himself as an eco-friendly anti-nationalist progressive. At the time, Carney told the Globe and Mail he didn’t think he was cut out for the political sphere, saying, “The political world, it seems to me, is a world for optimists. I’m in a world that’s a world for realists.”

While he’s still circumspect on his long-term ambitions, it’s interesting to note he no longer maintains he’s not interested in politics. If anything, during our hour-long chat, he seems to be making an argument for why he’d make a good candidate.

He’s happy to explain what lured him, if reluctantly, to this rainy wind-swept isle in the first place back in 2012. “The [Bank of England’s] powers had doubled in size,” he explains. “It was a managerial challenge and an operational challenge to make it work. Not just to set interest rates but to oversee the financial centre and develop policy at a time when we were midway through reforming financial systems.” Then he adds with a glimmer, “And obviously other things happened while I was here that added to the interest.”

Broad-minded economic commentators, such as Financial Times columnist Martin Wolf, tend to take a more charitable view of Carney’s legacy than the victorious Brexiteers. “The most controversial issue is whether he’s gone beyond his remit in terms of the politics,” he told me in an interview. “He’s been dominant—some would say too dominant. But at the same time he’s highly respected internationally and has added quite a bit of lustre to the Bank of England. He’s flexible, intelligent and quick . . . Overall, I’d say he’s been successful.”

The irony of Carney’s legacy as a central banker, first in Canada and then the U.K., is that while he’s held governorships during two of the most financially turbulent times in modern history, the chaos has precluded him from making many bold or risky moves. Some would say he’s played it overly safe, but it’s hard to argue with his results. Interest rates have laid low—historically low—particularly throughout his tenure in the U.K., despite his early warnings they might rise due to an inflation crisis that never actually materialized. Whether you blame Brexit or financial austerity, the U.K.’s economy did not bounce back the way many (including Carney) initially expected it would. His critics point to this erroneous prediction as evidence of his short-sightedness, but Carney dismisses that assessment. “The decisions a central banker has to make over the course of a term are tough calls. You have a plan, but if the economy goes in a different direction, it’s important to take a different direction and not be wedded to a certain view. It’s also important that people understand why you’d taken that view—that it’s not capricious, or because of a hawkish or dovish bias, but because of where the economy is going.” In other words, correcting course is part of steering the ship.

Carney’s international star status was affirmed when, during his term as governor of the Bank of Canada, the economy largely withstood the 2008 crisis—though critics grumble it was largely down to financial regulation predating his tenure. Carney, unsurprisingly, will list off a series of ways in which he did respond to the crisis (introducing substantial liquidity to the system, keeping interest rates at a record low, among other things) irrespective of regulation.

In a sense, there are two versions of Mark Carney. The first is a brilliant, judicious captain in the storm. The second is a clever guy with great timing who managed not to screw things up. Taking an unfashionably centrist line, I’d say he’s both. The common criticism is that he hasn’t been truly tested. As Wolf remarked, “We don’t actually know how he’d perform in a first-rate crisis because he hasn’t had one to deal with.” It’s an assessment that drives Carney nuts.

“If I took the test and I studied hard and then did well on the exam—have I not been tested?” he asks. He references the famous John F. Kennedy quote, “Victory has a thousand fathers, but defeat is an orphan,” and explains that in central banking they have a saying of their own: “Financial stability is an orphan.” What he means is that in his job, the unsexy business of averting financial meltdowns in the first place is a greater measure of success than heroically dealing with the ones that do transpire.

What would have happened, Carney asks, if the bank hadn’t secured a billion pounds ready to plunge into the markets the morning after the Brexit vote, if required? When the polls closed at 10 p.m. the night before, he reminds me, market option probabilities predicted a 10 percent chance of the vote turning out the way it did. The unthinkable occurred—the country voted to Leave, the just-elected-majority-holding PM resigned—and for days the U.K. economy hung in the balance. Years of maddening political chaos would follow, but in the end, economically speaking, Britain’s predicted economic catastrophe was averted—at least under Carney’s watch.

This lack of event is what Carney would like to take credit for. It’s also the reason the Brexiteers love to dismiss him as a second-rate foreigner. By accident and default (specifically the lack of a functioning opposition), Mark Carney emerged during the Brexit process as the unofficial leader of what one camp called “Project Fear” and the other called “basic reason.”

The governor’s office, where we have our chat, is the size and shape of a squash court, a room upholstered in mahogany and gilt. For all his casual charm, Carney seems very much at home here. Rarified surroundings rather suit him. He makes no effort to hide what his friend Dominic Barton, former McKinsey chief and now Canadian ambassador to China, described to me as “the giant computer sitting on top of his head.” What I mean is that he doesn’t talk like a politician. He is a numbers guy with dazzling recall, and makes zero effort to hide it, whether in a boardroom in Davos or sitting across the table from me.

His instinct when prodded is not to gently persuade the sceptical generalist before him, but instead to intellectually bombard. Politicians, especially the clever ones, learn to simplify their answers, but Carney refuses. During our interview, he pours forth an astonishing cascade of facts and figures, which I suspect he knows will send me scurrying back to read up for days after our interview.

Journalists have compared him to George Clooney, but I’ve interviewed Clooney and he’s nothing like Mark Carney. Clooney has the kind of charisma that makes anyone he focuses on feel clever. The Bill Clinton thing. Carney’s magnetism is different—he’s like the cool but uncompromising professor who expects you to keep up.

At one point, I attempt to press him on his environmental remit, which is (broadly speaking) to seduce big business into developing concrete plans to reduce its carbon footprint. His sell, in essence, is that companies that ignore climate risks will suffer losses and “fortunes will be made” by those who get in early and invest in renewables. I push back, asking if he isn’t just pandering to the base capitalist instincts that got us here in the first place, all carrot and no stick. What’s the “or else,” I ask him, beyond the abstract threat of human extinction? Who’s going to make these companies (or entire nations) adhere to environmental targets after they’ve set them, since we know that, generally speaking, they don’t? Surely, I continue rather plaintively, it’s about punitive measures, real regulation, a complete reordering of the system. A stick?

“I don’t have a stick,” he says.

“Well, you need a stick.”

“Sticks are for others to have.”

Yes, I know he’s a guy whose job is talking with the private sector and he’s not a policymaker, but given the current emergency and his access, shouldn’t he be making a more honest argument, even if it’s one big business doesn’t want to hear? Isn’t it time for a broader moral reckoning, i.e., less growth, less wealth, even (dare I say it) less jobs?

Carney calmly hears me out, then chuckles, shakes his head and says, “Leah, I don’t think fewer jobs is ever the answer.

It’s only later, when I play back the tape, I realize he was correcting my grammar. That’s something a smart politician would never do. I liked him all the better for it.

The elephant that follows Carney around every room, lumbering behind him at summits and G7 conferences like a loyal pet, is the question of his ambition, or as political types say, his “potential” as a candidate.

With Carney, it’s hard to imagine he’d be up for anything but a top file on the winning team. While you can picture him enjoying a beer on the community barbecue circuit, the thought of him warming the Opposition back bench is unthinkable. He was widely rumoured to have been passed over for the International Monetary Fund (IMF) top job, which recently went to Bulgarian and former World Bank CEO Kristalina Georgieva. I ask if this made him sad, and Carney throws back his head and roars. “It’s been a pleasure to work with Kristalina,” he says. “Our offices work well together.”

Inevitably, conversation turns to his loyal pet elephant, the one sitting quietly behind him in the governor’s office. So, what of it? Does he want it? Is he going to deny it? Little crinkles appear at the corner of Carney’s eyes. He is, quite literally, twinkling his answer across the 17th-century boardroom table. I feel a meaningful understanding has been exchanged between us. He will run. Of course he will. What else is he going to do? Host a podcast? He’s Mark Carney!

The next day, listening to the tape, Carney’s silence is as blank and unreadable as a freshly painted wall.

As we chat in his office—still arguably the beating heart of the global economy if there is one—the story of a rumoured federal bailout over the now-shelved Teck oil sands project is leaking out, setting Canadian media alight. We don’t discuss it, and anyway Carney won’t be drawn into such matters—but of course he’s already made his position clear. He’s anti-carbon, pro-earth, but also staunchly against divestment of big energy companies, so long as they sing from his UN hymnbook. It’s a position that unites him with his old friend, Deputy Prime Minister Chrystia Freeland, a.k.a. Ottawa’s ambassador to Alberta.

Observers are already pitting Freeland against him for the next Liberal leadership contest. If it did happen, we’d all be in for quite an interesting race. They’re contemporaries, after all, with almost identical CVs. While Carney was born in Fort Smith, N.W.T., the son of two teachers, like Freeland he was raised and educated primarily in Edmonton. Then Harvard/Oxford for both and, in Carney’s case, the years with Goldman Sachs and a career that took him to New York, Tokyo and Toronto.

Carney’s potential is self-evident, but I wonder (prodding again) if, for all his many accomplishments, he isn’t a bit of a yesterday’s man when it comes to the current political landscape? Surely it’s not cynical to point out that we live in a time that rewards authenticity over vision, messy humanity over groomed perfection, unvarnished “truth” over well-conceived argument. Carney is a centrist, an intellectual, an unapologetic member of the elite—a cautious middle man in the era of extremes. Does he have what it takes to win?

In response, Carney refers back to Freeland. “Take Chrystia and myself,” he says. “You can say, ‘Well, they’re part of the elite because they went to Harvard and Oxford and they go to Davos and they know a bunch of people and they’re in these circles.’ Or you could cloak it a different way and say she’s from Peace River and I’m from Fort Smith and we went to public schools, and we are public servants and have been public servants for years. We could have done other things but we chose to be public servants.”

Fair point, but it’s also a somewhat shaky comparison since Freeland left Oxford to become a low-paid stringer for the Financial Times in Eastern Europe, where she watched the Berlin Wall fall, hung around in refugee camps, fearlessly grilled oligarchs and business titans, and wrote books about it. Whereas Carney took a job with Goldman Sachs.

I’ve interviewed Freeland, too, and one of the interesting things about her is that she doesn’t seem to care about money. Or, to be precise, she doesn’t seem to care about the stuff it can buy. Her house is a mess, her clothes are an afterthought. Yes, she seems interested in status, power and issues. But money? It’s just not her thing. I ask Carney if he’s been to Freeland’s house and he seems surprised at the question, but allows that yes, he has. (He is, in fact, godfather to one of her three children.) I say he will have noticed then, how little she cares about money. At this Carney smiles tightly, then looks at me as if to say I should tread carefully.

“So do you like money?” I ask him.

“That’s, ah—hmm. That’s a very odd question.”

“I know it’s an odd question,” I say. “But think it’s also an important question.”

“Look,” he says. “I’ve been a public servant for many years.”

Which is not actually an answer, but fine. After all, what’s he supposed to say? Yes, I like money? After the chairman of the Federal Reserve, Carney is arguably the most powerful central banker in the world. Of course he likes money. Money is Mark Carney’s superpower—not just making it but managing it and safeguarding the systems within which it ebbs and flows and by extension forms the everyday lives of ordinary people everywhere. It’s not a moral contradiction for Mark Carney to like money—money and public service cannot be neatly separated after all.

Mark Carney is a man who understands money the way the Pope understands God; which is to say, both intimately as well as in all its terrifying complexity. Isn’t it interesting that he finds the subject of how he feels about money weird and embarrassing to talk about?

The Steady Hand

Central-banking superstar Mark Carney is back in the news this week calling out the UK government's self-inflicted financial turmoil. But what's really going on behind those twinkling blue eyes?

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